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GDP growth hits two-year high of 0.6%: ONS

UK GDP grew by 0.6% in Q3, the fastest rate seen since Q4 2016, according to the latest ONS statistics.

Rozi Jones
|
9th November 2018
London city finance skyline
"We should not be lulled into a false sense of security by a Q3 that was propped up by a bounce in consumption. "

UK GDP grew by 0.6% in Q3, the fastest rate seen since Q4 2016, according to the latest ONS statistics.

However the strong quarterly growth was driven by growth of 0.3% in July which stemmed from strong retail sales boosted by warm weather and the World Cup.

Month-on-month growth in real GDP has been flat in both August and September 2018, and experts say the market should "not be lulled into a false sense of security" by the quarterly results.

Rob Kent-Smith, head of national accounts at the ONS, said: “The economy saw a strong summer, although longer-term economic growth remained subdued. There are some signs of weakness in September with slowing retail sales and a fall-back in domestic car purchases. However, car manufacture for export grew across the quarter, boosting factory output. Meanwhile, imports of cars dropped substantially helping to improve Britain’s trade balance.”

Will Hobbs, head of investment strategy at Barclays Smart Investor, commented: “We should not be lulled into a false sense of security by a Q3 that was propped up by a bounce in consumption. Incoming private sector confidence surveys tell us very clearly that the sky is darkening a little for the UK as the realities of a hard Brexit start to weigh more visibly on short term private sector decision making.

"Long term we retain our view that the UK’s trend growth rate will be dragged back to respectability by its still flexible and likely growing workforce, its world respected institutional context, and a corporate sector forged mostly in the white heat of global competition. However, we would caution that the greater the confidence someone predicts the near term path of the economy, the less they should be trusted.”

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